Stocks fell on Thursday as energy shares followed slumping oil prices lower and technology issues declined, putting the brakes on an August rally that has taken stocks to 10-month highs.
The U.S. economy shrank less than expected in the second quarter and fewer workers filed new claims for unemployment benefits last week, supporting views the economy was starting to heal after a severe recession.
The PHLX semiconductor index <.SOXX> declined 1.5 percent, with SanDisk Corp
Semiconductors are giving back recent gains and leading the technology sector lower, said Bennett Gaeger, managing director at Stifel Nicolaus in Baltimore.
He said a lack of investors typical at the end of August may be behind the pullback. Without having everyone focused on the marketplace right now, you're going to find the path of least resistance, and at this point that is going to be on the downside, Gaeger said.
The Dow Jones industrial average <.DJI> dropped 73.16 points, or 0.77 percent, to 9,470.36. The Standard & Poor's 500 Index <.SPX> lost 10.52 points, or 1.02 percent, to 1,017.60. The Nasdaq Composite Index <.IXIC> fell 26.43 points, or 1.31 percent, to 1,998.00.
The S&P 500 is up more than 50 percent from its March lows on expectations the economy was recovering from the deepest recession in decades.
On the upside, shares of Dow component Boeing Co
Shares of bailed-out insurer American International Group Inc
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)